The trade body’s chief executive told the Mortgage Business Expo in London that the FSA’s decision to query regulated firms’ interest rate policies earlier this year was just the tip of the iceberg.
“The regulator is not finished looking at bridging market. They will start with the regulated firms and then move on to the brokers.
“They will be looking at certain cases and seeing some have gone to regulated firms and some to unregulated ones but they will struggle to see why some deals have gone the regulated way and some have not.
“If unregulated firms are doing regulated products then they are breaking the law. The regulator is in the middle of this whole process and I worry that the industry has shot itself in the foot and reputation-wise we can’t afford to keep doing that.”
Alan Cleary, managing director of Precise Mortgages added that some firms in the sector had simply ignored the warnings from the FSA.
“The response from part of the industry has been ‘screw it, I’ll keep my head down and see what happens’. That’s even with the regulator looking directly at it.
“The industry needs to come back to the simple question, ‘would you sell these products to your mum?'”
